#DigitalSkeptic: New Media News Bets Are No Solutions

After 15 years into a new-media generation, even two industries' giants still have no clue what they're doing.

New media loses its new mindNow, these issues would be just the worries of throwback news nerds -- save for one crucial fact: The brightest lights of the Information Economy have suddenly decided that fixing the news business is the new "new thing."

No less than eBay ( EBAY) founder Pierre Omidyar said last week he's set to invest in some sort of undefined investigative news initiative with Glenn Greenwald of Salon and The Guardian fame. Steve Jobs' widow, Laurene Powell Jobs, is backing a new-media brand called Ozy. And let's not forget that Amazon's ( AMZN) Jeff Bezos took over The Washington Post ( WPO) and Chris Hughes poured some of his Facebook ( FB) dollars into The New Republic.

Suddenly the challenges faced by those who do get paid to disseminate news -- that is, the execs speaking here in New York last month -- is critical stuff. Because, at least based on the public information about these new Silicon Valley news brands, none of the stubborn challenges of the 21-century news business seem to be taken seriously by Silicon Valley.

Ozy.com -- which boasts the backing of high-power Valley angel investor Ron Conway and Google ( GOOG) Chief Legal Officer David Drummond -- will try to compete in the Information Age news brawl with a brand argument of "The place you go to get a little smarter, a little sooner."

Omidyar described how his new-news enterprise would solve the major challenges of our age to The New York Times' David Carr: "If I engage in that system and actually change the rules of the system, I can make it work a different way," he said.

The plantation economy of newsTo these tired eyes, all these media execs -- old and new -- are glossing over the real challenge head for news: how our business has become a vast plantation of mostly unpaid news workers.

According to Swedish-based Pingdom, which tracks and optimizes Web performance around the globe, last year blogging services Tumblr and WordPress combined to have 147 million blogs -- probably created by an un- or under-paid person or two. And major media outlets have been shameless about grabbing the fruit of those unpaid millions. It was actually an April Fool's joke back in 2011 when The Huffington Post's unpaid contributors would be awarded "tasty sandwiches" for their efforts.

All of which makes of brutal and sad business reality: Once something costs little or nothing, there's nothing anybody - not even the smartest people in the world -- can do to figure out how to make that thing worth anything.

Meaning, the longer news stays in the business of paying nothing for news, the longer nothing new happens in the business of news.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.